The Art of Enron

Most people can bear adversity; but if you wish to know what a man really is give him power. This is the supreme test.
—Robert G. Ingersoll, Unity 1883

Unless you happened to work at Vermont’s Ben and Jerry’s in 1985 when the 5 to 1 rule was in effect1, America’s corporations, unwittingly or not, promote a type of culture that is “dog-eat-dog”. Under such merit-based systems, ambitious employees clock in long hours and rely on a variety of skills to climb the competitive corporate ladder. The highest tier of company leadership is where the best fruits of labor can be enjoyed.

Enron executives took this culture model and its fruits to an unprecedented level. For them, the culture wasn’t confined to activities in Enron’s trading floors and accounting offices; for this precious few, it became a way of life in which nothing was ever enough.

According to Frey and Rosin (2002), founder and Chairman Ken Lay’s lust for real estate manifested in four houses in Aspen. CEO Jeff Skilling’s thrill-seeking tendencies had him hiking the Rockies, scaling glaciers in Patagonia, and off-roading in Australia, among other “bone rattling adventures.” Other top executives of Enron spoiled themselves with strip clubs, cars, boats, and horses.2 This precious few indulged on a level attainable to the rest of us only in our fantasies.

Enron’s top tier was made up of, quite simply, boys and their toys. Wealth comes with opportunities, and among them is the power to influence. With their extravagant lifestyles, Enron’s executives instilled an over-the-top culture rife with an obsession for making money. This resulted in cut-throat competition among employees.

Enron Art Collection Promotes a Healthy Company Image, Covering What Lurks Below the Surface

Andrew Fastow, former Enron CFO
Andrew Fastow, former Enron CFO

Over the course, concepts of quality and substance were abandoned because it was only the illusion they wished to perpetuate—that Enron was a healthy company, if not the healthiest. Its CFO, Andrew Fastow, was right in line with keeping up appearances. As well as nimble financial gymnastics, he encouraged an art collection representative of the perceived vision of Enron: contemporary, avant-garde, cutting edge, and superior.

Thus an art committee was established with a budget of $20 million. It comprised five members who were assigned the mission to travel the world and look for art that would put Enron at the top of worldwide collections. Each member of the committee brought significant expertise to the table, or at least a strong passion for all things art.

According to the Houston Chronicle (2002), the curator at the Houston Museum of Fine Arts, Barry Walker, was a member of the committee  who was quoted as saying,

The ideals were very high. . . . They wanted an important collection. They were striving to be cutting edge and to represent the Enron culture—which at that time sounded like a good thing.

Lea Fastow Named Head of the Art Committee

Lea Weingarten Fastow, wife of former Enron CFO Andrew Fastow, became head of the art committee. Lea’s interesting family background included her mother, Miriam Hagar Weingarten, who represented Israel in the 1958 Miss Universe Contest, and then won for Best Speech.

This same Miriam was the first female in the Israeli military forces to cross the Suez Canal into Egypt, an accomplishment made possible by disguising herself as a male. (At the time, it was against the law  for Israeli women to go to the front lines of combat.) She later married wealthy Texan Jack Weingarten, and gave birth to two girls, one being Lea.

Lea had a happy childhood of plenty, yet as a 9-year-old she was greatly upset when her parents divorced. She moved on to pursue a college education at Tufts University, where she met Andrew Fastow. After Andrew and Lea graduated from Tufts, each earned degrees from the Kellogg School of Management at Northwestern. Thereafter, Andrew accepted a job offer from Enron—on the condition that Lea be offered a position as well.

wooden sculpture
Wooden Sculpture

While Andrew’s career took off, Lea paused hers to be a full-time mother to two sons. The couple shared a zeal for collecting art, which eventually brought Lea back into the fold at Enron to chair its art committee. Privy to Enron’s less-than-honest ways, Lea engaged in fraud herself.

Upon Enron’s scandalous collapse, Lea pleaded guilty to tax evasion and spent one year in jail.

Upon her release, Lea temporarily pursued nursing before ultimately utilizing her expertise to start an art consulting business, which is her vocation today.  Lea’s husband was out of jail after six years, and spends his time giving talks on corporate fraud and doing research for a law firm.

Enron Art Committee Members

Jeff Shankman was making a fortune among Enron’s top traders. However, there was only so much Jeff could learn about natural gas, so he became well-versed in a subject that highly interested him—art history. Hence, he gained a spot on the Enron Art Committee.

Jeff’s contributions to the committee must have gone unnoticed, for he was left out of the distributions of astronomical bonuses to traders while Enron was crumbling. Bitter about this, Jeff testified against Enron in several lawsuits and shared Enron’s unofficial motto, “It’s just ‘Try to get as much as you can’ ” (McLean, 2005).

Post-Enron, Mr. Shankman endured financial difficulties from unsuccessful business ventures that included a hedge fund and a cement business. All the while, Jeff’s dedication to art endured as he served as Trustee of the Contemporary Art Museum in Houston.

However, even his art pursuits turned sour. He had purchased a painting from a New York gallery and later deemed it a forgery. When he attempted to blackmail the gallery, the response was a lawsuit.

Few people have the wealth to survive lawsuits flying back and forth, and Mr. Shankman was not one of them. He declared bankruptcy. One would think Mr. Shankman might have learned a thing or two from Enron’s debacle. Alas, he hid assets and lied under oath about certain pieces of art valued at just under 1 million dollars. He testified that he had transferred all art in his name to an entity called “1818 Art Partners Fund”. The truth was he maintained control of the art.

His punishment was six months in jail and a fine.

Rifkin, former Director of Atlanta’s High Museum on the Enron Art Committee

Dr. Ned Rifkin, former Director of the Menil Collection and Atlanta's High Museum of Art
Dr. Ned Rifkin, former Director of Houston’s Menil Collection and the High Museum of Art

Dr. Ned Rifkin was one of two art professionals on the committee (the other being the above-mentioned Barry Walker). Rifkin, former Director of the High Museum and Houston’s Menil Collection, among other positions, is perhaps most well-known for the successful Rings Exhibit during the 1996 Summer Olympics in Atlanta.

Rifkin’s one and only run-in with the law was a ticket for letting his dog run unleashed on Two Mile Hollow Beach in East Hampton, New York, for which he dutifully paid the fine (McMorrow, 2015). Rifkin now teaches Cinema Studies at Purchase College of the State University of New York (SUNY).

Mike S. McConnell, sharing the enthusiasm for art of the other committee members, also emerged from the Enron catastrophe unscathed—maybe because of his integrity. In addition to serving on the Enron Art Committee, McConnell, former Head of Global Marketing at Enron, founded Enron’s Vision and Values Committee.

Quote McConnell (2007),

At Enron, if we had held fast to our four values of respect, integrity, communication and excellence, we would still be a strong, innovative company today. I was a founding member of the Vision and Values Committee, and our goal was to indoctrinate those values and get everyone excited about living those principles at work. And, I would do it again today.

For inspiration, McConnell credits a collection of affirmations, or quotes, that he puts in his pocket daily.

Unfortunately, making money was more important to many of McConnell’s co-workers than living by the company’s stated values. He shares his enriching insight in a wonderful book entitled, Just Because You Can Doesn’t Mean You Should / Keys to a Successful Life (2007). I highly recommend it, and will give copies for graduation gifts in the future for friends and family. The world would be a better place if everyone could read and live by the words of Mike S. McConnell.

What the Enron Art Committee Bought

The art committee members had spent only $4 million when the mission was aborted. Below are a few items from the collection that had been purchased at the time of Enron’s epic collapse in 2001:

Soft Light Switch
Soft Light Switch
  • Soft Light Switch for $590,000. Not to insult a piece of art, but how one justifies the price of this piece  is beyond me.
  • Bower’s Wooden Sculpture for $766,000.  It was eventually sold to the Smithsonian for a price that broke even.
  • Jack Pierson’s sculpture, Stardust.

Had the committee’s work lasted longer, Enron might have had quite a valuable contemporary art collection. But, it was not to be.

Just as in the moral to “The Goose with the Golden Eggs,” which is one of Aesop’s fables, “Much wants more and loses all.”

Glossary

dog-eat-dog culture
An organizational culture is described as dog-eat-dog when it is marked by destructive and/or ruthless competition.

Footnotes:

1 Ben and Jerry’s company model was unique in that the CEO’s salary was tied to the salaries of employees, where the highest-paid employee made no more than five times the lowest-paid one. The company was forced to abandon this model in 1994 when it proved too challenging to recruit a CEO to replace the retiring Ben Cohen (Dreifus, 1994).

2 So impressive was a horse owned by an Enron executive that it played a role in Linda McCartney’s funeral in New York (Frey & Rosin, 2002).

REFERENCES

Cohen, R. (2006, Jun 21). The Enron family philanthropies. Nonprofit Quarterly. Retrieved from https://nonprofitquarterly.org/2006/06/21/the-enron-family-philanthropies/

Dreifus, C. (1994, Dec 18). Passing the scoop; Ben & Jerry. The New York Times. Retrieved from https://www.nytimes.com/1994/12/18/magazine/passing-the-scoop-ben-jerry.html

Ex-Enron executive indicted on bankruptcy charges. (2013, Sep 30). FBI. Retrieved from https://archives.fbi.gov/archives/houston/press-releases/2013/ex-enron-executive-indicted-on-bankruptcy-charges

Frey, J., & Rosin, H. (2002, Feb 25). Enron’s green acres. The Washington Post. Retrieved from https://www.washingtonpost.com/archive/lifestyle/2002/02/25/enrons-green-acres/88220b65-2f74-4b46-8665-e0b12e4cc01c/

Ingersoll, R. (1883, Apr 1/2016, Apr 14). Unity, The exchange table, True greatness exemplified in Abraham Lincoln. Quote Investigator. Retrieved from https://quoteinvestigator.com/2016/04/14/adversity/#note-13450-4

Johnson, P. (2001, Nov 8). Menil Collection director Ned Rifkin resigns. Houston Chronicle. Retrieved from https://www.chron.com/entertainment/article/Menil-Collection-director-Ned-Rifkin-resigns-2056938.php

McConnell, M. (2007). Just because you can doesn’t mean you should. Lincoln, Neb.: iUniverse.

McLean, B. (2005, Mar 7). A trader takes revenge in court, Enron-style. Fortune. Retrieved from http://archive.fortune.com/magazines/fortune/fortune_archive/2005/03/07/8253428/index.htm

McMorrow, T. (2015, Jul 16). Off leash and facing fines. The East Hampton Star. Retrieved from https://easthamptonstar.com/Police/2015716/Leash-and-Facing-Fines

Murphy, B. (2002, Jul 29). Enron’s $20 million art spree assailed. Houston Chronicle. Retrieved from https://www.chron.com/business/enron/article/Enron-s-20-million-art-spree-assailed-2107326.php

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4 thoughts on “The Art of Enron”

  1. I almost wanted to stop reading because I really don’t do well knowing about the “real world” and its dishonest people. Perhaps, Lucy, that’s why most of my books are fiction! However, I must admit yours was a fascinating piece. I was especially horrified to learn of Atlanta’s connection. Eh gads. Thoroughly done and well written, my friend. Thank you.

    1. Thank you so much for your kind words. When we next cross paths, I will show you Mike McConnell’s book. It is truly inspiring, and you will like it. I also can’t wait to hear your O.J. Simpson story. Lucy.

    1. Thank you so much, Carla. I enjoyed talking to you over the phone the other day. It has been awhile since it all happened, but I’m always receptive to any gossip about Enron.

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